every one per cent increase in the Bank of England's base lending rate correlated with a three per cent drop in government popularity.
Niall Ferguson's book "Always Right" explores the relationship between economic policy and political stability. He emphasizes that an increase in the Bank of England's base lending rate can significantly impact government popularity. Specifically, the book highlights a striking correlation: for every one percent rise in interest rates, there tends to be a corresponding three percent decline in the government's approval ratings.
This observation underscores the sensitivity of political fortunes to economic conditions. Ferguson suggests that as interest rates rise, public dissatisfaction grows, potentially leading to a loss of trust in the capacity of the government to manage the economy. Such dynamics illustrate the precarious balance between monetary policy and political support.
